EU's Brexit chief negotiator sets collision course over divorce bill

The prospect of the EU demanding tens of billions of pounds from the UK in return for a Brexit deal has been raised by the bloc's chief negotiator.

Michel Barnier used a speech to outline his priorities for handling the divorce - with the process set to be formally started on 29 March when Theresa May triggers Article 50 of the Lisbon Treaty to confirm the UK's intentions.

He said the first issue to tackle, in what he hoped would be an "orderly withdrawal", was to end uncertainty over the fate of 4.5 million EU citizens in Britain and vice versa by determining their residency rights.

But Mr Barnier said Britain would have to pay for its previous financial commitments to Brussels before any talks could begin on the future, which he hoped would include a new free trade deal.

While he declined to put a number on the sum of money to be requested, EU officials have previously pointed to figures of up to £52bn.

Such a demand has already been dismissed as "absurd" by International Trade Secretary Liam Fox, while other ministers have also rejected such a bill.

"The quicker we agree on the principles ... the sooner we can prepare these future relations," he said.

"Conversely, if we do not end these uncertainties and push them to the end of negotiations, we will be headed for failure."

Commenting specifically on the issue of a divorce bill for the UK, he added: "Each country must honour its commitments to each other.

"When a country leaves the union, there is no punishment. There is no price to pay to leave. But we must settle the accounts.

"We will not ask the British to pay a single euro for something they have not agreed to as a member.

"In the same way, the 27 will also honour their commitments concerning the United Kingdom, its citizens, companies and regions. This is the mutually responsible way to act.

"If I may quote one of the greatest men of European history, Winston Churchill: 'The price of greatness is responsibility'.

"That is true for Britain and for us."

He also indicated support for a so-called "honeymoon" phase to allow both the EU and UK to get to grips with the demands of a deal before being fully implemented.

The Prime Minister has previously threatened to walk away from negotiations if she deems it necessary, saying "no deal is better than a bad deal".

But Mr Barnier warned that no deal threatened to hit everyday business for firms and consumers alike with "very severe" air traffic disruption and long queues at customs - hitting supplies for UK industry among some of the immediate implications.

The EU is expected to release an initial response to the Article 50 notification within 48 hours of receiving the letter from Mrs May.

She (Munich: SOQ.MU - news) has already made it clear she is seeking a new partnership - not a messy divorce that would damage the EU as well as the UK.